Recipient Tax ID info via API?

[Sam Ritchie]

Hey all,

I'm currently integrating the recipient API into our app, and had some questions about how to store the Tax ID of each recipient locally.

At tax time, we're going to have to generate 1099s for the recipients to whom we send transfers (as you guys document on your site). The recipient API doesn't look like it exposes any tax information; do I have to go ahead and store SSNs and EINs myself? Do you have any advice about how to handle this requirement? I'd imagine there are some legal requirements to storing sensitive information like this.

I was also curious if the recipient API could support returning the last 4 digits of the active bank account's routing number, so I can display this for users without storing the information on my end.

Thanks!

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Sam Ritchie (@sritchie)

Paddleguru Co-Founder
703.863.8561
www.paddleguru.com
Twitter // Facebook

[John Obelenus]

I've used Avalara's (http://www.avalara.com/) API for handling tax, and even wrote a python connector/API layer for it (if that happens to be the language you're working with: https://github.com/activefrequency/pyavatax)

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[Sam Ritchie]

We're currently not charging sales tax on our payments (we handle race registrations for athletic race organizers, similar to active.com or EventBrite)... hopefully this isn't something we're screwing up :)

So Avalara stores tax related info and helps to generate and file 1099s in April?

John Obelenus

May 1, 2014 8:24 PM

I've used Avalara's (http://www.avalara.com/) API for handling tax, and even wrote a python connector/API layer for it (if that happens to be the language you're working with: https://github.com/activefrequency/pyavatax)

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Sam Ritchie

May 1, 2014 8:22 PM

Hey all,

I'm currently integrating the recipient API into our app, and had some questions about how to store the Tax ID of each recipient locally.

At tax time, we're going to have to generate 1099s for the recipients to whom we send transfers (as you guys document on your site). The recipient API doesn't look like it exposes any tax information; do I have to go ahead and store SSNs and EINs myself? Do you have any advice about how to handle this requirement? I'd imagine there are some legal requirements to storing sensitive information like this.

I was also curious if the recipient API could support returning the last 4 digits of the active bank account's routing number, so I can display this for users without storing the information on my end.

Thanks!

Sam Ritchie

May 1, 2014 8:22 PM

Hey all,

I'm currently integrating the recipient API into our app, and had some questions about how to store the Tax ID of each recipient locally.

At tax time, we're going to have to generate 1099s for the recipients to whom we send transfers (as you guys document on your site). The recipient API doesn't look like it exposes any tax information; do I have to go ahead and store SSNs and EINs myself? Do you have any advice about how to handle this requirement? I'd imagine there are some legal requirements to storing sensitive information like this.

I was also curious if the recipient API could support returning the last 4 digits of the active bank account's routing number, so I can display this for users without storing the information on my end.

Thanks!

[John Obelenus]

Yes, you poll for a tax amounts (they're service is geared towards physical good and takes shipping sources/destination into accounts). And then later once everything is confirmed you can commit the tax. And they help prepare all the goods necessary for accounting based on those numbers.

Since their target/specialty isn't for digital goods/services you may find something else that has a better rate. But generally, payment processors are never going to handle tax for you (since it varies so widely, and payment processing is enough of a hurdle). 

Sadly, the Avalara website isn't very developer/small biz friendly. Best bet is to get on a phone call with them to find out if it fits for you

[Sam Ritchie]

Gotcha. We're a marketplace, so we're more concerned with filing 1099s for the race organizers we've paid out to at the end of tax season.

John Obelenus

May 1, 2014 9:21 PM

Yes, you poll for a tax amounts (they're service is geared towards physical good and takes shipping sources/destination into accounts). And then later once everything is confirmed you can commit the tax. And they help prepare all the goods necessary for accounting based on those numbers.

Since their target/specialty isn't for digital goods/services you may find something else that has a better rate. But generally, payment processors are never going to handle tax for you (since it varies so widely, and payment processing is enough of a hurdle). 

Sadly, the Avalara website isn't very developer/small biz friendly. Best bet is to get on a phone call with them to find out if it fits for you

[Avi Marcus]

Sam, have you seen this page about the difference between using stripe transfers and using stripe connect?

https://support.stripe.com/questions/stripe-connect-vs-sending-transfers-via-api

One of the differences is that if you use connect, then stripe is responsible for sending a 1099 -- and they fill out the SSN/EIN on stripe.

So if all these payments are only and exactly a cut of a transaction settled with stripe, then you might be better of using stripe connect.

-Avi

[Sam Ritchie]

We actually have to hold on to funds for a while, since we also charge for race registrations that occur on the day of the race and don't use stripe's credit card processing. The fees end up being more variable than a cut per transaction, making Stripe Connect unsuitable.

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